Local marketers boycott forced Dangote to export refined products – Refinery

• Published On: 12 September 2024 at 18:35

The Vice President of Dangote Industries Limited, Devakumar V.G. Edwin, has expressed frustration over the boycott of Dangote Refinery's products by local marketers, noting that despite the Dangote Refinery's significant production capacity, local marketers are purchasing only about 3% of its output.

In an X space hosted by Nairametrics on Wednesday, Edwin revealed that despite the refinery's efforts to provide affordable petroleum products, many Nigerian traders continue to import refined products rather than sourcing from the local refinery.

"The whole point of building this refinery in Nigeria was to use our own crude rather than export raw materials and import finished products.

"We should be able to refine and use the finished products within Nigeria and produce more to export the surplus," he told me.

The remaining 97% of the refinery's output, including diesel and jet fuel, is exported.

This export is the result of a boycott by local traders who refuse to buy at the refinery's reduced prices.

As a result, the refinery has been forced to focus on international markets, despite its original goal of supplying the Nigerian market.

Edwin stated, "I'm selling 2 to 3% to small traders who are willing to buy, while the remaining 95 to 97% I'm forced to export," when asked about the quantity of refinery products sold locally.

He claimed that some marketers are purposefully obstructing refinery operations by choosing to import products rather than support local refining.

He also revealed that local marketers have written to President Bola Tinubu to express their concerns about the refinery's pricing policies.

"They wrote to His Excellency, the president, claiming that we are disturbing the market by dropping our prices," Edwin told me.

Edwin went on to say that since local marketers have blocked the distribution of their products within the country, the refinery has been exporting the majority of its petroleum products.

He stated that the Dangote Refinery has the capacity to produce up to 54 million litres of refined petroleum products per day, depending on the availability of crude oil.

However, inconsistencies in local crude supplies have forced the refinery to rely on imported crude from countries such as the United States and Brazil.

This problem is exacerbated by international oil companies (IOCs) prioritising foreign markets, frequently selling crude oil at significantly higher prices than local buyers can afford.

He emphasised that the refinery's production capacity is more than sufficient to meet Nigeria's petroleum needs, with only 44% of its output meeting the country's total demand for refined products.

The Dangote Refinery, which started operations in March, began supplying diesel and aviation jet fuel in April. It is expected to begin supplying premium motor spirit (PMS) this month (September).